By Linda Kor During the April 14 meeting of the Navajo County Community College Governing board, the preliminary budget for Northland Pioneer College was presented by Associate Vice President and Chief Business Officer Maderia Ellison. According to Ellison, the budget reflects the adjustments that the college has made to address the economic impact of the COVID-19 pandemic. The state of Arizona approved a budget in late March that excluded the anticipated $14.2 million in Rural Aid and other community college proposals. As a result, NPC is expected to receive nearly $10 million for the upcoming year, with the amount $889,000 lower than the prior year. Ellison admitted that creating a budget during a world-wide pandemic had its challenges. “Already people are losing their jobs, worrying about how they will pay their mortgage or rent, trying to determine what expenses can be deferred or eliminate all while trying to stay safe. To allow the college to focus on a budget that takes into account the economic downturn associated with the COVID-19 pandemic, the budget calendar and budget assumptions adopted by the District Governing Board in December 2019 have been modified.” She noted that the college does not want any current or future students to postpone or abandon their educational pursuits and stands ready to help students, taxpayers and employees with a tuition reduction for the upcoming year, a lower levy rate for taxpayers compared to the current year and an increase in the salary for employees to cover cost of living and to align with the minimum wage of $12 per hour. She noted that the risks to property taxes include the closure of Cholla Power Plant’s Unit 4 in December, which is an estimated annual impact of $653,904. The other risk is that Transwestern Pipeline is disputing its centrally valued properties in Arizona. This means that NPC may have to refund property tax revenues and interest in the amount of $233,000 in fiscal year 2021 related to tax years 2016 and 2017. This will also decrease property valuations. State funded operating aid in the preliminary budget includes nearly $1.6 million, which is a decrease in revenues of $12,900 over the current year. Operating aid is based on the past two years of enrollment. State equalization aid will be just over $8.4 million, which is an increase of $692,400 over the current year, with state funding for STEM related activities expected to decrease slightly from $339,500 to $334,800. To encourage enrollment in the fall and spring semesters the college, for in-state, Apache County and the Early College program, administration proposed cutting the tuition rate in half to $40 per credit hour, despite board approval last month of an increase to $79 per credit hour. “This is in an effort to ensure our students remain in school and continue to pursue their education,” stated Ellison. She explained that this reduction could be accommodated by using funds from the $33.8 million unrestricted fund balance that had been designated to projects such as construction at the Show Low campus. The reduction would have a $2 million impact to that fund. Board member Elias Jouen commended the administration for bringing the proposal forward and the motion was unanimously approved by the board that was present, which included Jouen, Everett Robinson and Daniel Peaches. Board member Derek Leslie was present for a portion of the meeting but had to excuse himself for another commitment and board president Frank Lucero was not in attendance. In the discussion for wage increases, Ellision explained that the original recommendation developed was a four percent increase for the faculty, adjunct faculty and exempt employees. A revised recommendation is now set at a 2.5 percent increase, which Ellison noted would just cover the cost of living adjustment. “This particular year, the employees really stepped up and took a lower proposal to ensure that funds would be available to handle other ongoing needs,” stated Ellison. There will also be a $1 per hour increase for non-exempt employees in alignment with the minimum wage increase. President Mark Vest commended faculty and exempt staff for their decision on the matter. “My initial thought was to lower the (wage) recommendation on both sides, for both exempt and non-exempt employees. To their credit our faculty said no. They understood the salary compression caused by the minimum wage on entry non-exempt staff and were willing to take a reduction on their side so that our non-exempt entry level employees could get the full recommended raise on their side.” The salary increase was unanimously approved by the board and will go into effect on July 1. The board also approved the preliminary budget with general fund and unexpended plant fund totals of $43.6 million, a reduction of approximately $3 million over last year’s approved budget of $43.9 million. Regarding the property tax revenues, the board reviewed various options such as setting the levy rate at the maximum, maintaining the same rate and forgo monies associated with new construction or the option recommended by staff, labeled the “TNT option.” “That option allows us to not only reduce the levee rate from $1.82 to $1.78, but it allows us to capture new construction money,” explained Ellison, which would allow the college to recoup, or pickup, new construction monies. With that option, the property tax rate for existing construction would be lower but new construction would have an additional cost for the first year. The board approved setting the primary property tax levy and rate below the maximum amount, and with that approval a Truth in Taxation hearing will not be required. The 2020 Truth in Taxation Analysis shows this amount calculated at a rate of $1.7827, would result in a levy of $15.7 million. This represents a levy increase of $239,353 associated with new construction. The board also approved the preliminary 2021-2023 capital budget for the next three years of $14.3 million, a reduction of over last year’s budget of $14.8 million. Projects to be funded include renovations and new work to the White Mountain Campus in the amount of $10 million. The final adoption of the budget will take place at a special meeting on May 19.
